Shock therapy: Cyberonics link to deaths and injuries

Judy Bowling could easily complete the night shift at a New York medical clinic, drive the 20-mile commute back home, yank off her favorite green scrubs and grab a few hours of sleep. After school, the single mom and her young daughter would often jump in the car so the child could spend the night with Ms. Bowling’s parents, giving the two some cherished “girl time” during the drive.

But life changed radically after Ms. Bowling had a “VNS” device by Houston, Texas-based Cyberonics (Nasdaq: CYBX) implanted inches above her heart to try to control her epileptic seizures with tiny electric shocks transmitted to the brain.

She is one of thousands of patients who have been implanted with the device that Dr. Peter Barglow terms, “completely worthless.”

“I’d never dream of subjecting anyone to that sort of nonsense,” said Dr. Barglow, an MD with more than five decades in the psychiatry field, now handling a busy practice in Berkeley, Calif. After extensive examination of the issue and VNS studies, he said he considers any association with VNS irrational.

In Ms. Bowling’s case, the seizures became worse, and she quickly spiraled downward both physically and mentally.

Ms. Bowling’s experience is one of more than 9,000 Cyberonics-linked injury reports submitted to the US Food and Drug Administration from 1998 to this month. It is the manufacturer's responsibility to determine whether these are linked to its medical device used to treat difficult epilepsy and depression cases.

In fact, more than 1,980 Cyberonics-linked death reports were uncovered in our investigation.

These “adverse events” resulted from the device made and touted by a company staggering beneath two extensive FDA warning letters and targeted by a US Senate investigation regarding effectiveness and safety concerns examined during its controversial FDA approval process. And the heat’s still on in the form of a false claims lawsuit that we believe the government should move forward.

Losing it: In the institution

Ms. Bowling had to fold up her scrubs and place her 10-year-old daughter under the temporary care of her parents. With that pocket watch-sized VNS device still pulsing in her body, Ms. Bowling then found herself shuffled from psychiatric hospital to psychiatric hospital. Often she arrived as a screaming, writhing ball of fury, bound in a five-point restraint from which she says she learned to escape.

“It was a nightmare,” she said with a nervous laugh. “Like something you see on TV.”

By then, her mother had already told Judy’s big sister, Nancy Bowling, that she felt certain the personality changes were caused by the VNS (vagus nerve stimulation) device. She investigated and became convinced the problem was indeed that device shooting tiny electric shocks into her sister’s brain.

Judy Bowling settled into what would become her final, five-month stay at a psychiatric hospital. In New York’s Rockland Psychiatric Center – an institution she now remembers fondly - the normally mild, disciplined then-45-year-old woman manipulated and fought for her place in the inmate pecking order.

One day, an 18-year-old inmate made fun of the way she looked in the throes of a seizure. Ms. Bowling stood up to her and the teenager threw a punch. Ms. Bowling flew into the toughie who had been known to enjoy a good street fight now and then. Fists flew. Feet kicked. Hands grabbed.

The street fighter grabbed a chunk of Ms. Bowling’s glossy blond locks. And another. And, while keeping her own hair out of Ms. Bowling’s reach, yet another handful.

“She pulled out half my hair!” said Ms. Bowling, now 50.

Nancy Bowling insisted that the neurologist (who has not responded to TheStreetSweeper’s request for comment) authorize removal of the VNS device the family suspected caused such uncharacteristic behavior in Judy Bowling.

But he was reluctant. In fact, February 2009 documentation shows it took a congressman’s interest to convince the neurologist to authorize removal of the device.

Medical literature contains cases that point toward a link between VNS and the onset or worsening of psychosis.

A hospital admitted a 38-year-old epileptic patient claiming he was the devil. He had tried to cut his own throat because he believed he heard the voice of God urging him to kill himself.

The VNS inside him pumped out a few seconds’ electrical charges every five minutes, according to his doctors’ medical report.

Just three months earlier, doctors had surgically implanted the device. He’d had mental issues previously that he’d overcome but after surgery his mental state hit the boiling point. Psych ward doctors tried anti-psychotic drugs over five months to try to break his psychotic state. To no avail.

Desperate doctors combed the medical literature and found 11 published cases of VNS inducing or aggravating psychosis. On their suggestion, the neurologist repeatedly reduced the VNS pulse rate, a simple procedure using a computer.

“The improvement in his condition following each reduction in VNS pulse intensity was swift and dramatic,” doctors wrote.

His improvement was so startling, doctors signed papers authorizing the patient to move to a halfway house to begin his transition back into society.

FDA’s bizarre approval sets device free in the marketplace

We’ve found Cyberonics reports describe more than 10,000 deaths, injuries and equipment malfunctions. These are “adverse event reports” filed in the FDA’s “MAUDE” online reporting system. These reports represent events that may be linked to VNS as well as some that occurred in VNS patients with other medical issues that make establishing a VNS link more difficult. Anyone knowledgeable about an adverse event, from doctors and medical facilities to patients and family members, may anonymously file a report here.

FDA spokeswoman Jennifer Rodriquez said in an email that the medical device reports are just one of several post-market data sources.

“As such, the FDA evaluates each situation on a case-by-case basis, considering a variety of factors to determine whether additional analysis or action may be needed for a particular device,” she said.

So how did the device get FDA approval?

The VNS first got approval in 1997 for use in difficult cases of epilepsy. Then the FDA went into a bizarre – and secretive – application process to approve the use of VNS for treatment-resistant depression or TRD.

The FDA’s head honcho then responsible for approvals, Dr. Daniel Shultz, made an astonishing decision to override an entire FDA panel and sign the company’s application - personally.

He approved the application despite objections of more than 20 FDA scientists, doctors and managers, according to a report filed in the Congressional Record. He acknowledged to staffers that the public would be unaware of this.

Reports of death after death and injury after injury among VNS epileptic patients poured in, TheStreetSweeper found, even as the company sought the depression-use application.

During that time, the FDA also socked the company with an official warning letter in December 2004 that listed 30-odd serious allegations – including failure to fully investigate adverse events - uncovered during the agency’s two-month inspection of Cyberonics. The company took months to address the issues to get the FDA to close the file just three months before Dr. Schultz stunned the FDA team with his decision.

FDA reviewers: Like an “experimental project;” “disturbed”

The FDA panel reviewed Cyberonics’ application materials for 15 long months. They focused on Cyberonics’ clinical studies on depression (TRD) and determined they did not show the device was safe or effective.

One reviewer said in an email: “I am disturbed that VNS might actually get an approval for ‘‘TRD’’. In my opinion, they do not have adequate data and I don’t understand how this can move forward.”

Another wrote: “As an MD interested in science, it seems to me that such an approval would be akin to approving an experimental product.”

Cyberonics increased its lobbying effort, in the midst of all this, to mount the company’s record high in 2005 of nearly half-a-million-dollars.

Meanwhile, the FDA rumblings reached the ears of Sen. Charles Grassley and Sen. Max Baucus, who commanded an investigation into the FDA’s decision.

Though the FDA team recommended again and again that the device not be approved for treating depression, the Senate staff report states that “at every stage of the review, the team was instructed bythe FDA official, who ultimately made the decision to approve the device, to proceed with the next stage of pre-market review.”

Patients and doctors were kept in the dark about the scientific dissension or that Cyberonics’ short-term study “failed to reach, or even come close to reaching, statistical significance with respect to its primary endpoint (of efficacy).”

The FDA team requested that the company strengthen its weak study results by conducting a new randomized, controlled study prior to approval, according to the report. Cyberonics refused to conduct that study pre-approval.

The investigative report and the senators harshly criticized the whole mess. On Aug. 10, 2005, Dr. Schultz resigned by “mutual consent” with the FDA commissioner. He later found a job with a consulting firm serving companies regulated by the FDA.

But Cyberonics already had what it wanted. On July 15, 2005, the company walked away with FDA’s approval letter in its back pocket.

Another risk: Medicare/Medicaid approval fails - again

Insurance giant Blue Cross Blue Shield hit the warning bell shortly after the FDA approval with an ominous comment that “overall, the evidence supporting efficacy of VNS is not strong.” Over the years, insurers tended to pay in some depression cases but generally refused because of the safety and effectiveness questions.

Insurance often isn’t covering VNS treatment now, according to Dr. Robert Dolgoff, director of the Berkeley Therapy Institute in California.

Cyberonics chief executive Daniel Moore mentioned this very issue during the last earnings call. Mr. Moore, who replaced the embattled CEO in charge during the application fiasco, partially blamed weakness in the last month of the quarter on “an unusually large number of changes in insurance coverage.”

Cyberonics has tried numerous times to get the ever-important Medicare/Medicaid reimbursement for VNS for depression.

But time and again, Medicare/Medicaid has said, “No,” and it seems doubtful Cyberonics will secure coverage for depression use, effectively shutting itself out of its most promising market. After the May 2007 Medicare denial, Cyberonics filings say it ceased marketing VNS for depression in all markets.

The stock price crumpled by 10 percent last May on the most recent news that federal administrators once again said, “No,” to Medicare reimbursement costs for depression.

The Centers for Medicare and Medicaid Services (CMS) pays for about 25 percent of the implants, the company’s filings state. The cost for implant surgery and programming the device runs about $25,000.

The company didn’t respond to TheStreetSweeper’s request for comment. Investors may find other viewpoints on Cyberonics here.

Risk: Options, options and more options for difficult epilepsy and depression cases

“Write this down, ‘TMS,’” said Dr. Dolgoff.

TMS or transcranial magnetic stimulation is probably the hottest, new FDA-approved treatment for depression. Dr. Oz featured this nerve-stimulating therapy on his show, showing a doctor using a painless magnet inside a helmet-like device on an audience member. The magnet – pinging like a subdued woodpecker - stimulates the part of the brain responsible for depression. Therapy takes about 35 minutes, five days a week for three to six weeks until depression disappears.

Results have been so encouraging that Dr. Dolgoff said his clinic now recommends TMS first for patients with depression.

This private company’s non-invasive therapy - a far cry from Cyberonics’ surgical implant - is among the potential risks listed in the company’s Securities and Exchange Commission filings.

Cyberonics also faces stiff competition from $58-billion Medtronic (NYSE: MDT), the giant that parlayed its Deep Brain Stimulation therapy beyond the Parkinson’s field into the refractory epilepsy field with FDA approval.

Mountain View, Calif.-area private company NeuroPace’s therapy just last November got FDA approval for difficult-to-treat epilepsy and is in early commercialization. This newcomer’s RNS device sends an electric pulse through thin wires precisely located at the one or two spots in the brain where seizures start.

“We don’t look at VNS from a competitive perspective. We really look at the need to grow the overall field,” said NeuroPace chief executive Frank Fischer.

A NeuroPace study found seizures dropped 37.9 percent in patients implanted with live RNS wires. For comparison, a Cyberonics’ study found seizures dropped just 28 percent with the highest level of VNS. The low stimulation VNS group saw 15 percent – or 2 percent less relief - than RNS subjects who received absolutely no stimulation from their RNS wires.

“Both of us, ourselves and Cyberonics, are going to benefit by virtue of the therapy becoming available. Because it gives the community something to think about, to discuss, to get excited about and then doctors refer their patients. That’s what’s not been going on in recent years,” said Mr. Fischer.

Since the therapy addresses difficult or refractory epilepsy, this poses some issues. Cyberonics claims about 70,000 patients in this comparatively small category of about 400,000 that seems unlikely to suddenly grow. In fact, only six more US units were sold last quarter than the same quarter the year before.

So replacement units would be especially important to sales growth. Unfortunately, Cyberonics’ is seeing a decline in replacement devices. They fell by 9 percent last quarter compared with prior year, or 1,047.

Cyberonics’ SEC filings also include Neurotech, CerebralRX and St. Jude Medical among the arm’s-length list of companies aiming for depression and epilepsy patients.

Signals? Insiders selling

Cyberonics insiders tip their hands about the level of confidence they have in their own company when they sell its stock like crazy. That’s all they’ve done in the past year.

In the last month alone, CEO Moore has sold more than his peers, peeling off over 11,000 of his direct and indirectly owned shares. He now owns little more than 191,000 shares of his company. Under his automatic trading plan over the last two months, he’s cut down his direct and indirect ownership by nearly 11 percent – not a good sign for investors.

Conclusion

Judy Bowling, now free of the VNS device, still struggles with some memory problems and depression, along with lost confidence.

“I lost my life over this. I lost it,” she said, her voice quivering. “I’ve been so traumatized that I won’t be able to go back to work as a nurse.”

Like other families, the Bowling family is not suing Cyberonics because a 2008 US Supreme Court decision allows manufacturers to avoid being sued in state court if their medical devices have been approved by the FDA.

Ms. Bowling and her daughter now get more girl time together, and Ms. Bowling is making plans to become a counselor. She wants to go back to the New York state psychiatric hospital, Rockland. But this time, she hopes to gain respect for her counseling. Instead of her left hook.

The company behind the VNS device, we believe, faces its own challenges.

*Considering more than 10,000 death and injury reports, are the FDA and Cyberonics acting responsibly? Only the iciest heart could ignore reports like the one from a parent who believes the VNS stopped her daughter’s heart: “She meant everything to me …”

*Plagued by Medicare’s decision to deny coverage of its anti-depression device multiple times, the door to the depression space has slammed shut on Cyberonics.

*One of the most ominous red flags surrounds a false claims complaint filed Feb. 4, 2013. Filed as United States of America, et al v. Cyberonics, Inc., this is separate from the complaint filed and dismissed by a former employee. The lawsuit obviously poses risks to the company if the government chooses to pick this up, as we believe it should.

TheStreetSweeper would love to see better treatments for epilepsy and depression patients. But not this device. And not this company.

* Important Disclosure: The owners of TheStreetSweeper hold a short position in CYBX and stand to profit on any future declines in the stock price.

Editor's Note: As a matter of policy, TheStreetSweeper prohibits members of its editorial team from taking financial positions in the companies that they cover. To contact Sonya Colberg, the author of this story, please send an email to scolberg@thestreetsweeper.org.